home loan finance blog
As much fun as they are, motor homes certainly arent cheap. What do you do if you have bad credit and cant afford a motor home? Is there such a thing as bad credit motor home loans? There are such loans available if you know where to look.
You know…owning a motor home is like owning a piece of freedom for many Americans. There is nothing quite like hitting the road on a beautiful summer day to destinations unknown with the whole family in tow.
When considering lending money to an individual, lenders are concerned with security. The higher the credit score, the more likely they are to be repaid as this high credit score indicates that the person involved has in the past paid back money they have borrowed.
In the absence of a high credit score, lenders will be looking for some type of security in the form of collateral. With it… it is fairly easy to get a home a home loan… simply because if you do not pay, the lender can take the home back and resell it, recouping most if not all of their money.
Motor homes, however depreciate immediately after driving them off of the lot so even if the lender takes it back they will still lose money. The other risk is that you can drive your motor home to Mexico and hide it– while you cannot hide your house.
So for bad credit motor home loans you have 3 options.
1.) Depending on how bad your credit is, the lender may take a chance on you but it will be at a very high interest rate (sometimes approaching 30%).
2.) Alternatively, if you are a homeowner you may be able to secure the motor home loan against your house (basically this is a second mortgage). Definitely use caution with this strategy…however, as if you are unable to pay for the motor home, the lender may very well foreclose on your home.
3.) Another option to consider–Learn about repairing and improving your credit score…This will really enable you to get the dream motor home you want at a fair price and terms you’ll be more than happy with. By making a committed effort to credit repair you’ll be amazed to see how lenders will beat a path to your door.
In summary, there are bad credit motor home loans available but it is prudent to carefully weigh your options. As fun as a motor home can be it is not worth losing your home or the stress involved in not being able to pay off a high interest rate loan.